KI completed the move to become a 100 percent employee-owned company late last week, a shift that should keep the company solidly independent and keep it in Green Bay for the long term.
KI could have sold out to any number of suitors, including those in the industry, an investment company or conglomerate, but Chief Executive Officer Dick Resch said it was important to him that ownership remain with its employees through an Employee Stock Ownership Plan or ESOP. He called it the beginning of a new era for KI.
“The goal was to transfer ownership to all employees, keep the company in Green Bay and support the greater community that we are in,” he said.
Employees were notified of the change during a town hall meeting yesterday at its headquarters in Green Bay. Resch told surprised employees, “Effective last Friday, April 27, KI completed its transition to 100 percent employee ownership through its Employee Stock Ownership Plan or ESOP. Simply stated, you now own the company, 100 percent of it. This is truly a historic moment in the history of the company.”
Resch said during the meeting with employees, which was also broadcast to the company's other locations, that the ongoing success of this business rests with each them. He said he firmly believe the ESOP structure best positions the company — and each employee — for success.
“With this whole transition, our options were very straight forward. We could have explored a sale of the business to a competitor, or to a private equity partner. Honestly, either of those options might have been easier and more expedient,” he told employees at the meeting. “But neither would have protected the business that you — and past generations of KI employees — have built over the past 77 years.
“I've never been one to talk legacy, but for me this is personal. I've spent 53 years of my life committed to KI. So, yes, it's important to me that KI and Spacesaver stay in the hands of our employees, and remain independent and headquartered in Green Bay and Fort Atkinson respectively.”
KI has had an ESOP in place since 2006, but prior to the transition to full employee ownership on April 27, the company was primarily owned by members of the Resch family. The KI ESOP started out with about a 7 percent share of the company. The KI ESOP grew to own about 29 percent of the company prior to the move to make it a 100 percent employee owned company last week.
The ESOP represents a stable ownership structure that will enable the company's growth over the long term, Resch said in an interview with Business of Furniture. The transformation also gives KI employees greater opportunity to take part in the benefits of stock ownership. KI has more than 2,000 employees worldwide.
Resch has always embraced entrepreneurship and the power of business ownership. Through the ESOP, he is transferring that to his employees. “We have committed employees that are owners,” he said. “We all do well together and as long as we continue to do well, the retirement plan with be very substantial for each employee.”